Wednesday, December 16, 2015

My Submission to the Productivity Commission's Enquiry into Intellectual Property

My submission concerns the issue of the Parallel Importation Restrictions (PIRs) in
Australia’s copyright act that regulate the importation of books into Australia.

In my view it is clearly in the interests of Australian book buyers that the PIRs be
abolished to enable our booksellers to import product from legitimate overseas
sources in circumstances where the local rights holder was over-pricing and/or
under-servicing. Australian consumers and readers would always be advantaged
under that scenario, if only by the competitive pressure placed on the local rights
holders to lift their game.

Australian publishers, authors and other book trade bodies have long been
resistant to this reform as the Productivity Commission well knows. They cite the
importance of territorial copyright to the vitality of the industry, and to Australian
culture in general. They are mistaken in their belief, however, that the PIRs
construct Australia as a rights territory.

Australia is a territory naturally, through its distance, population size, high literacy
levels and mature book trade infrastructure.

The PIR’s are just classic trade protectionist measures, long discredited in other
commercial realms (music and software, for example), that have absolutely nothing
to do with territorial copyright which is granted by exclusive contracts over titles and
lists. As they have operated for decades now, the PIR’s simply give protection to
under performing publishers, rights holders and importers by removing competitive
pressure.

The book trade around the world has always been territorially focused. Rights
trading remains a central and critically important feature, for the simple reason that
local operators in each territory are better able to exploit the various market
opportunities for any given title due to their familiarity with the marketing, publicity,
sales and distribution realities - in other words, feet on the ground.

There has never been any business logic for Australian booksellers to buy around
local rights holders if those rights holders were competitive and professional, and
treated their customers with respect. Operational excellence, including pricing
policies that were responsive to the level of the Australian dollar against the US
dollar and the Pound, has always been the best and only protection that was
needed.

But as the Commission’s own survey of book prices in Australia in 2009 showed,
significant and unjustified markups at that time, when the Australian dollar was
strengthening, were the norm.

While some heat has gone out of this issue over the last few years because of the
eventual lowering of prices by publishers due principally to competition from
Amazon (see my article on this issue here) and the falling dollar, I am concerned
that these circumstances are transitory and the old uncompetitive patterns could quickly reemerge if the dollar once again strengthens. The Australian book trade
and readers in general would be far better served if the PIRs were abolished.

In conclusion I would like to make a comment about any transitional arrangements
that the Commission may propose if indeed it recommended the PIR’s be removed.

With the dollar now much weaker than in the period 2009-2014 the significance of
the PIRs in the normal operations of importing in the industry has greatly dwindled.
The opportunity for booksellers to profit from ‘buying around’ has declined
dramatically, and hence their indulgence in it is quite sporadic.

In other words the low dollar is acting as a transition process in itself. Publishers
are not looking to the PIRs for business support. This therefore is the ideal time for
a swift and painless execution.

The Commission must remember that the concept and reality of territorial copyright
will not be affected one iota by such a move, despite what local rights holders and
authors will be loudly proclaiming.

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About Me

I spent 35 years in book publishing - educational, professional and trade (non-fiction). I retired in 2009 and became an Adjunct Associate Professor in the School of English, Media Studies and Art History at the University of Queensland (until 2013) and a sessional lecturer on copyright matters at the University of Melbourne (until 2016).